Πέμπτη, 8 Δεκεμβρίου 2011

The Euro: Who wants what.

The groups

Who they are

What they want

What they don't want

The Drivers

France and Germany

Chancellor Angela Merkel and President Nicolas Sarkozy joined forces to call for treaty changes to be signed by all 17 eurozone (at least) by March. They want a balanced budget "golden rule" adopted by all; automatic sanctions if deficits exceed 3% gross domestic product; harmonisation of eurozone corporation taxes and a tax on financial transactions.

France averse to Brussels having greater power over national budgets - ruling out any veto by European Court of Justice.Germany against European Central Bank intervention to buy up errant countries' debts in the form of bonds. Mr Sarkozy, initially in favour, decided against eurozone bonds.

The Piigs - the eurozone's most indebted nations

Portugal, Italy, Ireland Spain and Greece

Desperate for deal to convince markets to cut national borrowing costs. The EU/IMF bailouts of Greece, Ireland and Portugalwere all conditional on stringent austerity measures. Dublin, Athens and Lisbon have all responded to pressure to slash their deficits with recent austerity budgets. Italy's new technocratic government has too while Spain's new centre-right leaders are urged to follow suit.

All five against surrendering budget decisions to Brussels and adamant about staying in the euro. Ireland will not allow any change to its 12.5% corporation tax rate which it sees as its main source of growth; fears loss of sovereignty. Spain backs treaty reform but Irish government opposed.

All eight want to avoid a two-tier EU as they are obliged to join the euro, eventually. Poland wants say in eurozone decisions.Latvia, recipient of 2008 EU/IMF bailout, expects other countries to endure similar fiscal discipline. Lithuania avoided bailout but shares Latvia's position. Czechs are in no rush to join. Hungary, latest victim of the debt crisis, has sought IMF/EU funding.Romania wants to stay on course to join in 2015; says huge efforts made to meet deficit targets after 2009 EU/IMF bailout.Romania and Bulgaria anxious to join passport-free Schengen zone soon.

Although not part of the eurozone, Bulgaria will be deeply opposed to the threat to its 10% corporate tax - the EU's lowest - from the Franco-German proposals. Sofia was eyeing up 2015 as entry date. Most Swedes do not want to join the euro (voted against it in 2003) but have no opt-out. All but Sweden and the Czechs have agreed to limits on the scale of their debts. Latvia and Lithuania aim to join in 2014 and Warsaw sees euro entry as a "strategic objective". Czechs wary of Franco-German plan for centralised budget control.

Staying out - for good

UK and Denmark

UK and Denmark secured euro opt-outs but want a say in decisions about it. UK says the more it is asked for, the more it will ask in return - and any treaty agreed by the UK would have to go through parliament. Denmark wants speedy resolution to crisis with minimum treaty change.

UK PM David Cameron, under political pressure for a referendum on the EU and for repatriation of powers from Brussels, wants to avoid major treaty change and a tax on financial transactions that would affect the City of London. Denmark, taking over rotating EU presidency on 1 Jan 2012, wants to avoid change that would trigger referendum.

The other triple-A euro states

Austria, Netherlands, Finland, Luxembourg

All four alarmed by warnings of possible credit-rating downgrade that would affect cost of borrowing. Austria wants decisions with quick impact involving all 27 EU members voluntarily signing up to agreed debt and deficit limits. The Dutch and Finnish want tighter controls on rule-breaking states. The Netherlands argued for a Brussels commissioner to have power to expel member states from the eurozone.

Austria reluctant to have treaty change, complains fiscal union a "long-term process" of 3-4 years. Luxembourg also very wary.Dutch adamant they want no referendum and no loss of sovereignty to Brussels. Helsinki opposed to Franco-German plan to stop smaller EU countries (eg Finland) blocking permanent eurozone bailout fund decisions.

Smaller eurozone economies

Belgium, Estonia, Cyprus, Malta, Slovakia, Slovenia

Belgium's new government, faced with high public sector debt, needs low borrowing costs. Estonia, in the euro since Jan 2011, wants to be among the decision-makers. Cyprus, buckling under the EU's biggest public sector spending bill (15.4% of GDP) promises austerity measures but needs help to tackle spiralling deficit. Malta, with 2% growth, backs strong action for rule-breakers. Slovakia wants strong, automatic, enforceable rules to ensure fiscal discipline. Slovenian aims are unclear as the country has just chosen a new government.

Belgium against major treaty change - approval required by 9 parliamentary chambers. Estonia, against new EU institutions to tackle crisis, prefers to focus on Commission and ECB. Cyprusanxious to avoid "endless discussions" on automatic sanctions.Slovakia ready to see other states leave euro to protect eurozone. Malta against long treaty change process but will accept the Merkel/Sarkozy plan if no alternative.